Ericsson Slashes Workforce

Every day we hear depressing news of more companies laying off more staff in an attempt to cut expenditure and stay in the black, and no market seems to be excluded. Now it is the turns of the wireless world as LM Ericsson have announced that they have had to cut a massive 5,000 jobs.

This is a result of a large net profit fall from 5.6 billion kronor (around £480 million) to 3.9 billion (£335 million) which is not only due to the obvious affect of the credit crunch, but also because of “a dramatic drop in contribution” from Sony Ericsson the mobile handset manufacturers.

This is hardly surprising considering the trouble Sony Ericsson has been having, it’s just a couple of days ago we heard of the growing rift between Ericsson and Sony over the PSP. However this is a pretty drastic measure: they are cutting 6% of their 79,000 staff which is quite a lot for a large business like this.

But it is not all doom and gloom, although net profits dropped by 31% this has been put down to the aforementioned lack of support and restructuring costs, which is something that shouldn’t be affecting them in the long term. In the last quarter they did very well in fact, benefiting from the weak kronor and causing a rise in sales of 23% from 54.5 billion kronor to 67 billion kronor.

So what does this mean? This example just goes to show how volatile the market is, and how unstable jobs are – LM Ericsson are doing alright and they are still dropping jobs because of “Uncertainty in the market”. It really isn’t looking bright for the future, so keep your fingers crossed.

Source – Associated Press

Related Pages:

1. PSP Causes Sony–Sony Ericsson Split?
2. Sony Ericsson Aino – A PS3 Compatible Mobile Phone
3. Sony Ericsson Vivaz Mobile Phone Announced
4. Sony Ericsson Aspen Launched – A Green Windows Mobile!
5. Sony Ericsson Experia X10 Mini, X10 Pro and Vivaz Pro Announced

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